Macroeconomics: Principles and Policy (MindTap Course List)
13th Edition
ISBN: 9781305280601
Author: William J. Baumol, Alan S. Blinder
Publisher: Cengage Learning
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Chapter 8.A, Problem 2DQ
To determine
To describe: The difference between the government spending and the government purchase of goods and services.
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Chapter 8 Solutions
Macroeconomics: Principles and Policy (MindTap Course List)
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- Give typing answer with explanation and conclusion Explain why a $1 increase in government spending leads to more than a $1 increase in GDP.arrow_forwardWhat are government transfer payments? Are they included as part of the government spending component of GDP?arrow_forward.If the economy wants to decrease private sector's investment spending, a. both the government and consumers must increase spending. b. the government must increase its spending c. the government must decrease its spending d. the consumers must increase spendingarrow_forward
- From the expenditures approach, list and explain the components of GDP ? Example?arrow_forwardIn the economy of Kwartengland, the following figures are given for economic activity which was undertaken in 2013. All the figures are million Ghana Cedis Consumption Expenditure = 1000 + 0.8 YD Investment Spending= 600 Government Expenditure = 2450 Personal Taxes= 100 Exports= 100 Imports= 150 1. Calculate the investment and tax multipliers 2. By how much should exports change if government wishes to increase real GDP by 1000?arrow_forwardUse data below to answer the following questions:Consumption expenditures $300 billion, Government purchases $50 billionTaxes $40 billion, Investment $80 billion, Social Security payments $20 billionImports $30 billion, Exports $40 billiona) How much is GDP?b) How much are net exports?c) Social Security payments are government expenses. Should they be included in GDP? Explain.arrow_forward
- 1. If imports are $2 trillion, exports are $1.9 trillion, consumption is $3.8 trillion, investment is $700 billion, and government spending is $1.1 trillion, how much is GDP? 2. If consumption is $2.5 trillion, investment is $900 billion, government spending is $700 billion, imports are $1.2 trillion and exports are $1.4 trillion, how much is GDP?arrow_forwardWhat is the level of private consumption in GDP is 10,000, investment is 2,900, government spending is 1,600, imports are 3,100, and exports are 3,500?arrow_forwardIn its Budget presentation the Government proposes a lump sum tax increase of $80million. On the other hand, the Government decides to increase spending by $60 million. The MPC for this nation is estimated at 90 percent (0.9). What will be the impact on GDP and by how much?arrow_forward
- What is the biggest spending component of GDP?arrow_forward2) GDP (Y) = $1,200, consumption (C) = 150, exports (X) = 50, investment (I) = 125. What is government spending (G)? (Assume M= 0) (Show your math calculation)arrow_forward_________________ Are those expenditure of the government which neither cause any increase in the government asset or nor cause any reduction in the government liability.arrow_forward
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